By Tri Subhki R
As coal prices continue to struggle below $100 per ton, several coal producers are adapting to the challenging market conditions by implementing cost-reduction strategies, such as lowering the stripping ratio (SR) and hauling distances. These initiatives come in response to rising production costs driven by higher fuel prices.
“When coal prices dip below $100 per ton, producers are focusing on cost-reduction efforts. Many coal miners have started reducing the SR and hauling distances to minimize expenses,” said Ari Sutrisno, Chairman of the Indonesia Mining Services Association (ASPINDO), in an interview with petromindo.com on Thursday.
Ari also noted that mining services companies are prepared for the current market downturn, recalling the industry's struggles during the 2015 price slump, when coal prices fell to as low as $45 per ton.
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“Some coal producers are opting to increase production volumes to improve their profit margins,” Ari added. He emphasized that while mining companies can optimize their operations for greater efficiency, they remain at the mercy of global market fluctuations.
The Ministry of Energy and Mineral Resources (MEMR) has set a coal production target of 735 million tons for 2025, which represents a 3.5 percent increase over the 710 million tons target for 2024. In the first quarter of 2025, national coal production reached 171 million tons, or 23.26 percent of the total annual target.
Ari pointed out that the January to April 2025 period had been especially challenging due to extreme weather events that disrupted mining operations. “We are still evaluating whether we can meet the full-year production target, with a clearer forecast expected in the second half of this year,” he concluded.
Editing by Reiner Simanjuntak
